interest rate in the TVM menu. (You can also use TVM if PMT = 0, regardless of the compounding periods.)

1.Call up the periodic interest-rate conversion menu (  ).

2.Calculate the effective annual interest rate from the nominal annual interest rate given by the bank.

a.Store annual interest rate in .

b.Store number of compounding periods per year in .

c.Press .

3.Calculate the nominal annual interest rate that corresponds to your payment periods.

a.Store the number of regular payments or withdrawals you will be making per year in .

b.Press .

4.Return to the TVM menu (ee ).

5.Store the just-calculated nominal interest rate in I%YR (press s ).

6.Store the number of payments or withdrawals per year in and set the appropriate payment mode.

7.Continue with the TVM calculation. (Remember that money paid out is negative; money received is positive.)

a.N is the total number of periodic deposits or withdrawals.

b.PV is the initial deposit.

c.PMT is the amount of the regular, periodic deposit or withdrawal.

d.FV is the future value.

When the interest rate is the unknown variable, first calculate I%YR in the TVM menu. This is the nominal annual rate that corresponds to your payment periods. Next, use the ICNV menu to convert this to the

88 6: Interest Rate Conversions

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